Mohegan Sun deal means millions annually for Mass. town

Thursday

Aug 29, 2013 at 12:01 AMAug 29, 2013 at 11:45 AM

A host community agreement between operators of Connecticut’s Mohegan Sun casino and Palmer officials would provide the small western Massachusetts town with nearly $3 million in upfront payments and more than $16 million in estimated yearly revenue if a resort casino complex was approved and built.

BOB SALSBERG and STEPHEN SINGER

A host community agreement between operators of Connecticut’s Mohegan Sun casino and Palmer officials would provide the small western Massachusetts town with nearly $3 million in upfront payments and more than $16 million in estimated yearly revenue if a resort casino complex was approved and built.

The deal, detailed on Thursday, also promises approximately $23 million in infrastructure improvements, including an upgrade of the Massachusetts Turnpike interchange near the proposed casino.

The nearly $1 billion project, which would also include two hotels, retail space and a water park, is one of three competing for the only western Massachusetts resort casino license.

Mitchell Etess, chief executive of the Mohegan Tribal Gaming Authority, said the development would be “truly transformative” for Palmer, a community of about 12,000 residents.

The proposed large payments to Palmer could have Eastern Connecticut officials taking a closer look at the agreements local towns have with the tribes, according to a Connecticut Conference of Municipalities spokesman.

Under an agreement with the state, the tribes give Connecticut 25 percent of the slot revenues at the casinos, money that is then distributed to cities and towns.

And the Mohegan tribe gives Montville $500,000 annually because it is the host town for Mohegan Sun. The town also expects to collect $129,000 in taxes during fiscal 2013-14 from slot machine leasing companies doing business with Mohegan Sun.

“We haven’t studied the agreement with Palmer,” CCM spokesman Kevin Maloney said. “But we would think the local host communities would take a close look at it.”

The Palmer Town Council is expected to formally approve the host agreement next week and set a date for a referendum in the fall. Voter approval is required before Mohegan Sun can apply to the Massachusetts Gaming Commission, which is expected to award regional licenses next year.

“Today begins our official campaign,” Etess told The Associated Press, noting that while Mohegan Sun has already had a presence in Palmer for four years it was not assuming victory at the polls.

“We don’t think it’s prudent to take anything for granted,” he said.

The agreement calls for annual fixed payments to the town of $15.2 million, plus a 0.25 percent cut of the first $400 million in annual gambling proceeds — or $1 million. The town would receive an additional 2 percent on each dollar of gambling revenue exceeding $400 million, according to the deal.

Mohegan Sun officials say the guaranteed revenue in the deal is more lucrative for Palmer than any of the other casino agreements reached in the western region. They say the annual payments would be equivalent to $1,200 per each household in the town.

By comparison, an agreement approved by Springfield voters calls for MGM Resorts to make $25 million in annual payments to the much larger city with more than 150,000 residents.
Hard Rock has proposed a resort casino in West Springfield.

Opponents of the Palmer plan, led by the group Quaboag Valley Against Casinos, see it as a threat to the quiet, rural way of life in the town and surrounding communities, generating increased traffic, crime and gambling addiction.

Kathleen Conley Norbut, a longtime casino foe who lives in Monson, claims Mohegan Sun has ignored the concerns of residents of neighboring towns.

“It’s a proposal that devalues my property as an abutter and I have no legal recourse,” Norbut said.

Mohegan Sun, which also owns Mohegan Sun at Pocono Downs in Pennsylvania, is one of two Indian-operated casinos in Connecticut looking to expand to Massachusetts, which passed a law in 2011 allowing for up to three regional casinos and one slots parlor.

Foxwoods Resort Casino is currently negotiating a host community agreement with officials in Milford. The $1 billion plan would be in competition with proposals in Boston and Everett for the eastern Massachusetts license.

Mohegan Sun and Foxwoods are responding to strong competition in the Northeast and a persistently weak economic recovery by seeking to boost revenue with expansions outside Connecticut.

Bulletin reporter Ryan Blessing contributed to this story.

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